2022 (6) TMI 1151

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....ent was completed u/s. 143(3) by order dated 23.12.2019 at a total income of Rs. 29,66,132/-, after making various additions. The assessee filed appeal to Ld. CIT(A) challenging one of those additions, viz. the addition of Rs. 15,71,040/- u/s. 56(2)(vii) on account of difference between the fair market value of the land purchased by assessee i.e. Rs. 1,35,23,540/-) and the actual purchase-price of the land (i.e. Rs. 1,19,52,500/-). However, the Ld. CIT(A) did not grant any relief. Against the order of Ld. CIT(A), the assessee has filed this appeal and now before us. GROUNDS: 3. The assessee has raised following grounds: "1. On the facts and circumstances of the case, the ld. CIT(A) NFAC Delhi erred in sustaining the addition of Rs. 15,71,040/- being the difference between alleged Fair Market Value determined by the DVO Indore and purchase price of Rs. 1,19,52,500/- u/s. 56(2)(vii) of the Income Tax 1961 of the land situate at village Reward Tehsil Depalpur which is wrong illegal and unjustified. 2. The Ld. CIT(A) should have considered the facts of the case in proper perspective. 3. The Ld. CIT(A) failed to appreciate that the meager difference between value of land ascerta....

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.... matter to DVO at the request of assessee and the Ld. DVO has finalized valuation at Rs. 1,35,23,540/-. The Ld. CIT(A) further observed that the difference in valuation is about 13.14% which has exceeded the permissible range of 5% as applicable for the assessment-year 2017-18. On this basis, the Ld. CIT(A) confirmed the addition made by Ld. AO. SUBMISSIONS OF Ld. AR: 6. Before us, the Ld. AR submitted that the assessee has provided the instances of similar transactions of land in that area and also supplied their registered documents to the Ld. TPO vide letters dated 03.12.2019 and 09.12.2019. Carrying our attention to the copies of letters placed in the Paper-Book, the Ld. AR demonstrated that there were two purchase-transactions of similar lands in the same area on 09/06/2016, viz. (i) there was a transaction of 6.54 bighas of land for a price of Rs. 24,50,000/-, giving per bigha rate of Rs. 3,74,376/-, and (ii) there was another transaction of 1.654 bighas of land for Rs. 24,50,000/-, giving per bigha rate of Rs. 3,74,149/-. Ld. AR submitted that the assessee has purchased the impugned comprising of approx. 21.73 bighas for a sum of Rs. 1,19,52,500/-, which comes to Rs. 5,50,....

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....umbai Bench in Suresh C Mehta vs. ITO-13(2)(1), Mumbai, ITA No. 33/Mum/2011, order dated 17.05.2013 where a similar issue arose and the Hon'ble Bench has held as under: "7. We have carefully considered the rival submissions, perused the relevant findings of the learned Commissioner (Appeals) as well as the Assessing Officer. The assessee has sold the property for a sum of Rs. 12,00,000, and has computed the long term capital gain at Rs. 10,05,783, whereas the V.O. to whom reference was made under section 50C, has estimated the fair market value at Rs. 13,79,913. For the purpose of section 50C, the Assessing Officer has adopted the value determined by the V.O. and has computed the long term capital gain at Rs. 11,38,020. Section 50C is a deeming provision wherein the fair market value for sale consideration received on an asset is deemed to be taken as per the value assessed or adopted by the stamp valuation authority for the purpose of stamp duty. Sub-section (2) of section 50C further provides that if the assessee claims before the Assessing Officer that valuation adopted or assessed by the stamp valuation authority has exceeded the fair market value of the property on the d....

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....sioner (Appeals) and the Tribunal can also examine into the fact whether the difference of less than 15% between the actual sale consideration and the value adopted by the V.O. can be ignored on the facts and circumstances of the case. In the present case, the assessee has objected to the fair market value adopted by the V.O. vide letter dated 13th November 2009. Neither the Assessing Officer nor the learned Commissioner (Appeals) entertained any such objection or has given any cogent reasons. If the assessee has made various objections to the V.O's report, the learned Commissioner (Appeals) was bound to look into these objections so as to arrive at proper fair market value. He was also bound to consider the contentions of the assessee that in case of difference of less than 15% between the value shown by the assessee and the value estimated by the V.O., the benefit should be given to the assessee and such a difference can be ignored. We, therefore, set aside the impugned order passed by the learned Commissioner (Appeals) and remit the matter back to him to decide the same afresh after considering the objections of the assessee to V.O's estimate as well as his claim for ben....